Fairness instinct trumps economic expectations on climate costs

March 22, 2014 — andyextance

ETH Zurich’s Robert Gampfer hopes governments can learn from the climate negotiation games he ran. Image credit: ETH Zurich

We care about fairness in sharing climate change costs, although differences in who’s more vulnerable to it can affect our ideas of what exactly is fair. That’s the clear suggestion emerging from a set of climate change negotiation games run by Robert Gampfer from the Swiss Federal Institute of Technology, ETH Zurich. In his experiments, students from Zurich universities took on the role of countries in climate talks trying to agree how costs should be shared. Robert feels this unusual approach provides unique insights into our true attitudes, and could help guide our leaders in responding to them.

“Proposals that are perceived as very unfair are likely to meet public resistance, and governments will therefore be unlikely to agree to them in the international negotiations,” he told me. “But the experiment also showed that participants who were richer or more responsible for climate change often acted rather fairly, even if this meant higher costs for them. This is quite a far-reaching conclusion, but maybe governments of developed countries could actually sell costly climate agreements to their citizens if they perceive some fairness obligation to accept them.”

This study builds on a realisation Robert made when looking into possible topics for his climate politics PhD, which he’s now writing the final thesis for. “A lot of surveys on climate change and climate policies ask only very broad questions – whether you would support your country reducing its emissions or not, for example,” he observed. “But we know very little about how specific aspects of global climate politics influence people’s opinion, for example the debate on burden-sharing fairness. In a standard survey it is easy to be in favour of emission reductions, because stating this does not cost you anything. Real emission reductions probably would have some cost, for example through higher energy prices.”

In seeking deeper insights, Robert realised that political science and economic experiments hadn’t addressed fairness much either. “This might be because many think people’s fairness preferences are not important for an international climate agreement,” he said. “I find this quite surprising: in the negotiations, governments use fairness arguments very often. And they probably do this, among other reasons, because they will receive domestic support from their citizens for adopting such negotiating positions.”

Fair game

Robert devised an experiment to study the role of fairness involving a game where pairs of people take on the role of two countries with differing status. Both are given ‘experimental currency units’ (ECUs), and have to decide how to split the 10 ECU cost of action needed to reduce or stop greenhouse gas emissions. One proposes a deal to the other, and if they agree the cost is simply taken away from their initial fund. If they don’t agree they pay nothing at first, but there’s a 50-50 chance they’re hit by a ‘catastrophic climate event’ that wipes out a proportion of their funds.

The order of play in Robert’s games, with the main proposal-response-consequence sequence of both experiments at the top, and the second experiment’s pre-game choice between high or low growth paths at the bottom. Robert uses a * to show where he multiplies figures together. Image copyright Springer, used with permission, see citation below.

In the first experiment Robert split 156 students into five groups with differing starting funds or losses set to be suffered if they’re hit by a catastrophe. In the control group both players are evenly-matched, but in the rest the proposer can be richer or poorer than the other player. Both either lose half of their funds when hit by a catastrophe, or the poor player loses two-thirds and the rich player one-third. A summary of the different games is shown in the table below. Each student got to play three times with different partners, with roles and funds resetting at the start of each round, ensuring they all got to be both proposer and responder at least once. Finally, they all got 1 Swiss Franc for each ECU they still had at the end of one of the three rounds they played, selected at random by a computer.

The five different sets of rules different students were given in Robert’s first experiment. Image copyright Springer, used with permission, see citation below.

With non-existent ‘rational’ players economic theories say that the deal should see proposers paying 3 ECUs, the lowest amount for which the responders are better off on average if they accept. Previous similar experiments shows that proposers tend to offer around half the cost, and responders tend to reject offers less than that. But in Robert’s experiment, when both players faced half their money being wiped out, rich players offered 6.33 ECUs on average, and poor ones offered 2.59 ECUs. Around three-quarters of offers were accepted in each case, which shows “a strong influence of the ability-to-pay principle”, he writes.

‘Mean proposer share’ doesn’t imply the proposers were all selfish – instead it’s the average offer made by the proposer towards the 10 ECU cost of halting greenhouse gas emissions in each of Robert’s scenarios. HiCap proposers are richer, LowCap proposers are poorer, and in the HiVul and LowVul scenarios the poorer country would lose more if a climate catastrophe happened. In the baseline scenario both players have the same funds and would lose the same if a catastrophe happened. Image copyright Springer, used with permission, see citation below.

Rich players’ generosity was reduced when they stood to lose a lower proportion of their funds than the poor countries, however, while poor countries became aware of the higher stakes. Rich proposers offered to pay 5.33 ECUs on average, and the poor responders now only accepted around six times out of ten. Poor proposers offered more, 4.21 ECUs, yet acceptance from rich responders still fell to around seven times in ten, Robert reported in the journal Climatic Change earlier this month. “Disadvantaged proposers might be prepared to make a higher payment offer to ensure acceptance and avoid catastrophe, since this offer is at least their own decision,” Robert wrote. “But disadvantaged responders simply confronted with a low, ‘unfair’ offer might tend to reject such unfair treatment, regardless of the potential material consequences. These potential implications of vulnerability differences have, to my knowledge, been largely unaddressed.”

Not all the offers towards the costs of stopping greenhouse gas emissions are accepted. The bar chart on the left shows the proportion of all offers that were accepted, and the one on the right shows the average value of all accepted offers. As before HiCap proposers are richer, LowCap proposers are poorer, and in the HiVul and LowVul scenarios the poorer country would lose more if a climate catastrophe happened. In the baseline scenario both players have the same funds and would lose the same if a catastrophe happened. Image copyright Springer, used with permission, see citation below.

Playing civilisation

The complexity of climate talks was underlined last year at the UN negotiations in Warsaw, when 800 representatives of charities and campaign groups walked out over the lack of progress. Image credit: Oxfam International, used via Flickr Creative Commons License.

In the second experiment Robert gave 90 students the chance to be ‘one-person economies’. He gave them starting funds of 8 ECUs each and let them choose to put their economies on “high growth” or “low growth” pathways. Over 5 rounds, each time they chose high growth they gained 5 ECUs, but increased joint climate risk of catastrophe 5% from the starting level of 15%. Each time they chose low growth they got just 1 ECU but no increase in risk of catastrophe. When they got to the proposal stage every student had determined their own wealth, and together each partner had differing responsibilities for the risk of catastrophe they faced. Every pair lost half their wealth if they did suffer a catastrophe, and each student again got to play three times. The final payments were also done in the same way as the first experiment.

Proposers showed a strong tendency to offer more when their responsibility for the risk of catastrophe between the two players was greater, and offer less when their responsibility was lower. For both players the total risk of catastrophe they’d accrued was also linked to their decision. And although responders were more likely to accept higher offers, historical responsibility appeared less important in their choice. That might be partly down to the relatively large funds the players had – 28.6 ECUs on average – Robert noted, which gave an average risk of catastrophe of 55%.

Focussing on the experimental details, it’s easy to forget that they’re supposed to show how people’s true feelings could influence government positions at climate negotiations. Can we really learn that from these games? Robert thinks so. “I’m confident that the main results are fairly robust, because I think the fairness principles tested are rather deep-seated moral convictions in many societies. But of course results may vary in different contexts where different nuances of fairness are emphasized. Especially the issue of historical responsibility is actually much more complex than in my simplified lab setting.”

If, like me, you think the games sound fun, you can try some soon thanks to the team Robert works in, led by Thomas Bernauer. “We are at the moment developing an infrastructure for internet-based experiments, where far larger groups of people from all over the globe with more diverse social and cultural backgrounds can ‘play’ against or with each other,” Robert revealed. “One of the first things we will do with this platform is to explore in more detail how people think about historical responsibility.”

I really like the idea of an online participation to assess how willing people are to pay the costs needed for the future. In the U.S., the political climate seems toxic to shared responsibilities and costs. A message too often heard is to say ‘each person should be on their own to decide how to run their life. I want my liberty and freedom. I don’t want someone else telling me what to do.’ That is an enormous problem.